Senior officials from the RPG group and Birla-AT&T-Tata union have signed a memorandum of understanding (MoU) to this effect. The deal between the two leading corporate groups was structured by Rabo India which had the mandate for finding a strategic partner.

"Airtouch Vodafone will retain its 49 per cent equity stake in the venture even after the restructuring. Both groups are awaiting approvals from their respective boards to announce a deal to this effect," sources said.

This will be the first cellular acquisition by the Birla-AT&T-Tata combine after they finalised an alliance to join in a three-way merger. The trio is also looking at other cellular areas to further beef up their cellular base. When contacted, top Birla-AT&T-Tata officials declined to comment.

Recently, the combine had also roped in Bank of America Securities to value Spice Telecom's cellular operations in Karnataka and Punjab. The Birla-AT&T-Tata union is keen to forge a merger/strategic alliance with the BK Modis-promoted Spice Telecom. Sources said that the proposed takeovers would help the group increase its subscriber base. After these acquisitions, it may also go for an overseas/domestic listing.

The Financial Express had recently reported that the RPG group's cellular projects in Chennai and Madhya Pradesh were looking for strategic partners. Companies like Hutchison Max, Bharti and BPL were in the race to pick up the 51 per cent stake in these ventures.

Rabo will now initiate talks with all leading cellular companies for RPG's cellular project in Chennai. The exit from the cellular ventures is a part of the major restructuring business by the group. The Madhya Pradesh circle has been valued at about $100-110 million, it is learnt.

Sources said Rabo India will not go ahead with the bidding process, which was used in the MP circle for finding the suitor. "Rabo India will approach all the players to finalise a transparent deal in the case of the Chennai circle," industry sources said here on Wednesday.

Once the merger gets approval, the Birla-AT&T-Tata combine will have cellular operations in Maharashtra, Goa, Gujarat and Andhra Pradesh. The union is looking at a user-base of about 2 lakh. At present, the Tatas have a subscriber-base of about 60,000 in Andhra Pradesh while Birla-AT&T had achieved a user-level of 1,05,000 in its areas of operations.